Coupang is the second-largest South Korean eCommerce platform, after Gmarket, and it’s been in comparison with Amazon attributable to its fast development and lightning-fast supply.
The corporate is at present attempting to enter the American inventory market.
And regardless that it’s primarily specializing in the Korean market, evidently it is a market we must always be careful for.
On this article, we’ll offer you a basic overview of every little thing you might want to learn about Coupang.
What’s Coupang?
Coupang has turn into one of many largest ecommerce firms on the earth. It has grown exponentially within the final couple years with none signal of stopping quickly.
The platform has gained reputation due to its inventive strategy and modern applied sciences utilized to cell ecommerce and customer support. It’s honest to say that the corporate has set new requirements for on-line procuring in Korea.
Coupang at present presents its Korean viewers one of the revolutionary door-to-door companies on the earth, which is supported by its unique know-how.
They really implement modern applied sciences in virtually every little thing. From huge knowledge to logistics, all aimed toward bettering the consumers’ procuring expertise.
The MIT Expertise Assessment and Forbes journal have ranked Coupang as one of many 50 smartest companies in the world.
Solely 9 different firms together with Tesla Motors, Google, Fb, Amazon, and Coupang are talked about in each lists.
Coupang’s Quick Supply
One of many components that has put Coupang among the many consumers’ favorites is their velocity.
The corporate has warehouses strategically situated in such manner that they declare that 70% of all Korean inhabitants are about seven miles from one in every of their over 100 achievement facilities, according to the company’s S-1.
Coupang additionally said that 99.3% of the orders acquired are delivered inside 24 hours of buy. – CNBC
In 2019, the corporate launched one of many largest causes for its fast development: Daybreak Supply. Which means that prospects that make a purchase order earlier than midnight have supply by 7 a.m. assured.
Amazon has not been capable of match that velocity but.
Coupang Historical past
Coupang was based in 2010, and it began as one thing much like Groupon for South Korean prospects.
It then expanded to turn into an eCommerce market, capable of topple the competitors within the nation inside its first three years.
By 2014, the company had quickly raised $300 million, largely from U.S. traders and in 2015 and 2018, they have been capable of increase $Three billion from SoftBank.
That manner, in eleven years, Coupang was capable of develop into the 50,000-employee enterprise that it’s right this moment.
These days, Coupang is without doubt one of the dominant forces of ecommerce within the South Korean market, in huge half attributable to its dedication with ridiculously quick supply speeds.
The founding father of the corporate, Bom Kim, has invested his efforts into supply effectivity. He talks about eCommerce as a matter that “boils right down to minutes and seconds.”
Philip Lee, a researcher of the South Korean tech world, mentions that it’s due to the expectations Coupang has set for purchasers that logistics have began to vary.
Why it’s best to learn about Coupang
The so-called Amazon of South Korea went public on the American inventory alternate looking for a $50 billion valuation.
The corporate had been on a roll earlier than that with their revenues almost doubling in 2020.
This meant a 91% soar, which implies round $12 billion. That is what occurred:
- The Seoul-based Amazon of South Korea joined the New York Inventory Alternate below the ticker “CPNG.”
- Coupang raised $4.55 billion and has been valued at about $60 billion.
- The corporate turned the largest IPO by an Asian firm within the U.S. because the report $25 billion by the Alibaba Group again in 2014.
That is how Coupang has turn into the biggest preliminary public providing this yr.
The corporate debuted with a $35 inventory worth and was capable of get an preliminary $60 billion valuation, $10 billion extra from what they’d initially pursued.
This preliminary public providing has settled their standing as a competitor of the dimensions of Amazon and Alibaba.
Supply: Forbes
Critiques about Coupang
Coupang’s success has confronted scrutiny associated to the lengths they go to maintain their supply occasions as little as doable, leading to poor working circumstances.
This declare is backed by native labor advocates and politicians.
Rest of World reported final fall that the corporate had “a enterprise ethic that prioritizes fast supply over worker security.”
Coupang vs Amazon
- Buyer Base: Coupang claims to have around 15 million active customers, in accordance with its most up-to-date submitting. If we examine it to Amazon, Coupang’s market appears to be a lot smaller.
- Market Saturation: Amazon and Coupang nonetheless have totally different market saturations. Coupang claims that a minimum of 200,000 third-party sellers are signed as much as promote on their platform. And though it is without doubt one of the dominant e-commerce firms in Korea, it captures solely 24.6% of the e-commerce market as per the numbers reported in April 2020.
- Memberships: One thing Amazon and Coupang have in widespread is that they arrive to closely depend on its membership system. At Coupang, thirty-two percent of customers at present pay for the Coupang Wow Rocket Membership, which might be the corporate’s equal of Amazon Prime.
- Personal Labels: Coupang has just lately expanded its private-label strains within the attire, magnificence and electronics areas. Their general gross sales margins are usually a little bit thinner due to its low price of supply, so Coupang is having a bet on the worth of first-party merchandise, much like Amazon’s technique.
- On-line Groceries. Coupang’s velocity of deliveries mixed with the quantity and placement of its many warehouses has helped the corporate break into on-line grocery a lot sooner than Amazon.
It’s honest to level out that evaluating Amazon and Coupang shouldn’t be solely about similarities, additionally it is necessary to contemplate the atmosphere.
For instance, Coupang has turn into such an eCommerce large within the South Korean market due to the particularities of their prospects.
South Koreans are usually extra receptive to ecommerce firms.
Do not forget that this is without doubt one of the most populated nations on the earth!
It additionally has a excessive charge of cell and web adaption with eighty p.c of Koreans living in cities with web entry, and 95% of Korean consumers that personal a smartphone.
These numbers are properly above the U.S. proportion of 80%.
Advisable for you: Inside Opportunity Explorer, The New Amazon Product Research Tool
The place is Coupang headed subsequent?
Identical to Amazon, Coupang is already beginning to broaden and turn into one thing extra than simply an e-commerce enterprise.
For instance, in December they launched a brand new video-streaming service referred to as Coupang Play, which is equal to Amazon Prime Video. Additionally, the corporate has been mentioning plans to launch a livestream procuring enterprise.
Coupang used to depend on a gaggle of subcontractors to have the ability to ship and ship their orders, however in January this yr, the corporate additionally launched Coupang Logistics, thus bringing its large achievement community in-house.
The South-Korean eComemrce large is now capable of deal with all their deliveries and isn’t restricted to a single trade both.
Which is why they launched Coupang Media Group; an in-house promoting platform similar to the rising retail adverts companies of Amazon and Walmart.
The corporate can also be at present engaged on Coupang Pay internally and so they even have a meals supply service referred to as Coupang Eats.
Though Coupang is making nice efforts to proceed rising as a enterprise, there hasn’t been a lot growth in different nations, however this is likely to be only a matter of time.
Supply: Modern Retail
What about Amazon within the Korean Market?
Coupang is likely to be making all these efforts to be a groundbreaking ecommerce participant in Korea.
That is, in large half, due to Amazon’s growth, partnering up with native e-commerce participant 11st (also referred to as 11 Avenue), as reported by The Korea Herald.
Korean consumers will now be capable of purchase tens of hundreds of thousands of merchandise immediately from the latter platform.
In response, Amazon launched Amazon International in 12 different markets.
Their present partnership with 11st features a choice that spans over 30 classes, together with style and electronics.
11st is owned by the cell service large SK Telecom and this cope with Amazon might imply a lift in Korea’s aggressive e-commerce market.
It’s true that Amazon must face robust native rivals like Coupang, Naver and Shinsegae Group, which acquired eBay’s Korean business for $Three billion in June this yr.
Ultimate Ideas
It’s very apparent that Coupang’s give attention to assembly buyer expectations and optimizing logistics have rightfully earned them the nickname of The Amazon of Korea.
Nonetheless, there are nonetheless limitations just like the language barrier and market saturation that the corporate must overcome, now that Amazon will turn into a participant within the Korean market.
